Families still struggling with cost

Rachel Browne, Daniella Miletic and Mark Kenny

David Baker said government assistance through the childcare benefit and rebate had little effect on affordability. Photo: Peter Braig

More than one-third of families struggle to pay childcare fees despite increased federal government assistance over the past decade, according to a new report by public policy think tank The Australia Institute.

The report, ''Trouble with childcare'', found that concerns about affordability outweighed difficulties with availability and quality. Report author David Baker said government assistance through the childcare benefit and rebate had little effect on affordability.

''Each time the government has taken steps to reduce the proportion of household income spent on childcare services, the increased assistance has quickly been absorbed through the charging of higher service fees,'' he said.

''Despite the cost of childcare being an election issue in 2004 and 2007 and subsequent increases in government assistance, a greater proportion of families were reporting cost difficulties by 2010.''

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According to the Department of Education, Employment and Workplace Relations, families with children in care pay an average of 7.5 per cent of their disposable income on fees after subsidies but Mr Baker found that many families are paying much more.

The Australia Institute's research found that households reporting cost difficulties were paying an average of 9.6 per cent of their disposable income on childcare.

Peak welfare body the Australian Council of Social Service has previously stated childcare costs for low-income families should be 5 per cent of disposable income.

Mr Baker's analysis found more than one in five low-income households who reported cost difficulties were paying more than 10 per cent of disposable household income for childcare services.

The federal government increased the non-means-tested childcare rebate to 50 per cent in 2008-09. Mr Baker said increasing government assistance was not the answer.

The report comes as the Gillard government committed $300 million over two years to a wage-augmentation package designed to boost take-home pay for chronically underpaid childcare workers.

The pay of Certificate III-qualified staff would increase by $3 an hour from July 1.

The government says higher-qualified staff would get even more from the new deal.

But the catch is centres must agree to funding transparency and must keep their fees affordable for parents.

School Education Minister Peter Garrett said the money was an investment in children and in the long-term development of good early childhood educators.

''We know that quality early childhood education and care is dependent on having a qualified and professional workforce,'' Mr Garrett said.

''We have listened to the sector and to parents and we are pleased to introduce this fund to help attract and retain qualified staff.''

The Early Years Quality Fund is part of the government's National Quality Framework. It will provide grants to childcare centres to give them the flexibility to attract and retain highly trained and qualified staff.